Business Expenses and Schedule C

Course Description

The Internal Revenue Service (IRS) reports that about 1 percent of small business returns are audited each year as part of its effort to close the “tax gap”—the difference between reported and actual income and expenses. In 2017 and 2018, the IRS continues to warn taxpayers to avoid excessive or improper claims for business credits as one of its "dirty dozen" scams.

In working with a small-business owner, a tax preparer must not only ask questions about expenses, but also understand the rules for deducting those expenses in order to prepare a return that is audit-proof.

The purpose of this course is to provide a thorough review of business expenditures that may be deductible on Schedule C for the 2018 tax year and provide an understanding of how to reduce the filing of incorrect or fraudulent returns. The course begins with an overview of the business-expense sections on Schedule C and then moves to discuss the more complex topics in preparing a Schedule C.

Learning Objectives:

After completing this course students will be able to:

identify the types of business expenses that are reported in Parts II, IV and V of Schedule C

correctly apply the rules for determining the deductible amount when given examples of business-related expenses

determine whether a given taxpayer is eligible to claim a home office deduction, and correctly calculate the available deduction

correctly calculate the available deduction for given taxpayers for car, travel, meal and entertainment expenses

apply the appropriate rules to determine whether the IRS is likely to regard a given worker as an employee or an independent contractor

understand the changes to Schedule C by the Tax Cuts and Jobs Act of 2017 (TCJA)